Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.

Yes
[ ] No [X]

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act.

Yes
[ ] No [X]

Indicate
by check mark whether the issuer: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes
[X] No [ ]

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).

Yes
[ ] No [ ]

-1-

Indicate
by check mark if disclosures of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405) is not contained herein, and will not be contained, to
the best of registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment of this Form 10-K. [X]

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company filer.
See definition of “accelerated filer” and “large accelerated filer”
in Rule 12b-2 of the Exchange Act (Check one):

Indicate
by check mark whether the registrant is a shell company as defined in Rule 12b-2
of the Exchange Act.

Yes
[ ] No [X]

As of
June 30, 2009, the aggregate market value of the registrant’s Common Stock held
by non-affiliates of the issuer was approximately $632,221 based on the last
sales price of the issuer’s Common Stock, as reported by Bloomberg LP Investor
Services. This amount excludes the market value of all shares as to
which any executive officer, director or person known to the registrant to be
the beneficial owner of at least 5% of the registrant’s Common Stock may be
deemed to have sole or shared voting power.

The
number of shares outstanding of the registrant’s Common Stock as of March 10,
2010 was 42,232,437.

DOCUMENTS
INCORPORATED BY REFERENCE

Listed
below are documents incorporated herein by reference and the part of this Report
into which each such document is incorporated:

Certain
statements in this Report are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. When used in this
Report, words such as “may,” “should,” “seek,” “believe,” “expect,”
“anticipate,” “estimate,” “project,” “plan,” “goal,” “intend,” “strategy” and
similar expressions are intended to identify forward-looking statements
regarding events, conditions and financial trends that may affect the Company’s
future plans, operations, business strategies, operating results and financial
position. Forward-looking statements are subject to a number of known
and unknown risks and uncertainties (including the risks contained in the
section of this report entitled “Risk Factors”) that could cause the Company’s
actual results, performance or achievements to differ materially from those
described or implied in the forward-looking statements and its goals and
strategies to not be achieved.

You are
cautioned not to place undue reliance on forward-looking statements, which speak
only as of the date of this Report. The Company does not undertake
any responsibility to publicly update or revise any forward-looking statement or
report.

Halo
Companies, Inc. (“Halo” or the “Company”) was incorporated under the laws of the
State of Delaware on December 9, 1986. Its principal executive
offices are located at One Allen Center, 700 Central Expy South, Suite 500,
Allen, Texas 75013 and its telephone number is 214-644-0065.

Pursuant
to an Agreement and Plan of Merger dated September 17, 2009 (the “Merger
Agreement”), by and among GVC Venture Corp., a Delaware corporation, GVC Merger
Corp., a Texas corporation and wholly owned subsidiary of the Company and Halo
Group, Inc., a Texas corporation (“HGI”), GVC Merger Corp. merged with and into
HGI, with HGI remaining as the surviving corporation and becoming a subsidiary
of the Company (the “Merger”). The Merger was effective as of
September 30, 2009, upon the filing of a certificate of merger with the Texas
Secretary of State. The Company subsequently filed a restated
Certificate of Incorporation effective December 11, 2009 which, among other
things, effected a name change from GVC Venture Corp. to Halo Companies,
Inc.

For
accounting purposes, the Merger has been accounted for as a reverse acquisition,
with HGI as the accounting acquirer (legal acquiree). On the
effective date of the Merger, HGI’s business became the business of the
Company. Unless otherwise provided in footnotes, all references from
this point forward in this Report to “we,” “us,” “our company,” “our,” or the
“Company” refer to the combined Halo Companies, Inc. entity, together with its
subsidiaries.

As of
December 31, 2009, after completion of the merger and amending and restating its
Certificate of Incorporation, the Company had outstanding 42,232,437 shares of
Common Stock with a par value of $0.001. Also as of December
31, 2009, the Company was awaiting regulatory approval from the Financial
Industry Regulatory Authority (FINRA) in regards to the following corporate
actions, in compliance with listing requirements of the Over the Counter
Bulletin Board (OTCBB): (a) a reverse split of the Company’s Common Stock, (b)
the above-mentioned name change, and (c) the issuance of a new stock
symbol. The regulatory approval was granted on February 24, 2010 with
an effective date of February 25, 2010. The Company’s new stock
symbol is HALN.

Halo
works with its clients, who are consumers who may be in various stages of
financial need, to assist in reducing their debt, correcting their credit
profile, securing a home mortgage, buying or selling a residence, providing
proper insurance for their assets, mitigating potential home loss, and educating
them in financial matters. The following outline briefly describes
Halo’s various subsidiaries and the products and services they
offer:

UHalo Group Mortgage,
LLCU Halo
Group Mortgage is a full-service mortgage brokerage institution in the retail
lending environment. Currently licensed in four southwestern states,
Halo Group Mortgage specializes in partnering banks with both current and
potential home owners to obtain mortgages.

UHalo Debt Solutions,
Inc.U Halo
Debt Solutions provides debt settlement services, negotiating and settling
various types of unsecured debt on behalf of its clients. The
Company’s primary goal is to help clients achieve an unsecured debt-free
lifestyle. The Company’s programs provide affordable payment plans,
based upon each client’s personal financial situation. Halo Debt
Solutions provides these services to its clients consistent with industry
standards for debt negotiation and educational support.

UHalo Group Realty,
LLCU Halo
Group Realty, a real estate agency, provides real estate services to home buyers
and sellers, including marketing and listing services and home value
appraisals. Halo realizes that most of its clients have real estate
needs and, because of the existing business relationship with other Halo
subsidiaries, these clients are often willing to utilize the services of Halo
Group Realty.

UHalo Loan Modification
Services, LLCU Halo
Loan Modification Services has developed a process that puts its
clients/borrowers into a systematic and streamlined work-out process to
establish affordable, long-term mortgages.

UHalo Select Insurance
Services, LLCU Halo
Select Insurance Services is a member in Halo Choice Insurance Services, LLC, a
company in which it owns a 49% interest. Halo Select Insurance
Services is currently licensed in Texas and can write additional business in
Arkansas, Louisiana, Mississippi, and Oklahoma through one of its affiliate
companies. Halo Choice Insurance Services represents the lines
of hundreds of insurance companies, including State Auto, Safeco, Travelers,
CNA, Progressive, and Hartford. Halo Choice Insurance Services’
relationships with these insurers give Halo Choice Insurance Services the
opportunity to offer competitively-priced auto, home, life, health, small
business and other insurance products to its clients.

UHalo
Portfolio Advisors, LLCU Halo Portfolio Advisors
leverages the complete Halo business-to-consumer suite of services to market
turnkey solutions to lenders. In today’s economy, lenders are experiencing an
overflow of distressed assets. Many debt servicers are currently
overwhelmed with imposed programs that require more resources such as people,
money and time to be effective. Halo’s technology systems are bundled with
transparency, accountability, efficiency, speed, and flexibility. This unique
strategy directs borrowers into an intelligent, results-driven process that
establishes affordable, long-term mortgages while also achieving an improved
return for lenders and investors, when compared to foreclosure.

UHalo Financial Services,
LLCU Halo
Financial Services recently began operations and is primarily focused in the
consumer debt education, analysis and debt workout program. Halo
Financial Services utilizes cutting edge technology and algorithms to produce
the best scenario determined for each individual. The technology is derived from
thousands of case studies which were evaluated and logged with consideration
based on multiple factors. Factors include state, region, income level, debt
load, type of debt, and many others. This entity is focused on
providing the Company additional opportunities in the market as its business
model takes into consideration the ever increasing regulatory issues surrounding
this consumer market.

The
consumer financial services industry is highly competitive, and there is
considerable competition from major institutions in Halo’s lines of business,
including national financial institutions, real estate agencies and insurance
companies, as well as specialty consumer financial services companies offering
one or more of the products and services offered by Halo. The
development and commercialization of new products and services to address
consumers’ financial needs is highly competitive, and there will be considerable
competition from major companies seeking to expand their own product and service
offerings. Many of Halo’s competitors have substantially more resources than
Halo, including both financial and technical resources. Additionally,
competition for highly qualified employees is intense.

Intellectual
Property

The Company maintains copyrights on all
of its printed marketing materials, web pages and proprietary
software. Halo’s goal is to preserve the Company’s trade secrets, and
operate without infringing on the proprietary rights of other
parties.

To help protect its proprietary
know-how, which is not patentable, Halo currently relies and will in the future
rely on trade secret protection and confidentiality agreements to protect its
interest. To this end, Halo requires all of its employees,
consultants, advisors and other contractors to enter into confidentiality
agreements that prohibit the disclosure of confidential information and, where
applicable, require disclosure and assignment to Halo of the ideas,
developments, discoveries and inventions important to its business.

Employees

As of December 31, 2009, the Company
had approximately 88 full-time employees. None of the Company’s
employees is covered by a collective bargaining agreement. Halo
believes that it maintains good relationships with its employees.

Legal
Proceedings

The Company is not currently involved
in any material legal proceedings.

Government
Regulation

The services provided by the Company,
through its subsidiaries, are extensively regulated by federal and state
authorities in the United States. Halo believes it is in compliance
with federal and state qualification and registration requirements in order that
it may continue to provide services to its clients consistent with applicable
laws and regulations.

Our limited operating history may
not serve as an adequate basis to judge our future prospects and results of
operations. Halo has a relatively limited operating
history. Our limited operating history and the unpredictability of
the consumer financial industry make it difficult for investors to evaluate our
business. An investor in our securities must consider the risks,
uncertainties and difficulties frequently encountered by companies in rapidly
evolving markets.

We will need additional financing to
implement our business plan. The Company will need additional
financing to fully implement its business plan in a manner that not only
continues to expand already established direct-to-consumer approach, but also
allows the Company to establish a stronger brand name in all the areas which it
operates, including mortgage servicing distressed asset sectors. In
particular, the Company will need substantial additional financing
to:

effectuate
its business plan and further develop its product and service
lines;

·

expand
its facilities, human resources, and infrastructure;
and

·

increase
its marketing efforts and lead
generation.

There are
no assurances that additional financing will be available on favorable terms, or
at all. If additional financing is not available, the Company will
need to reduce, defer or cancel development programs, planned initiatives and
overhead expenditures. The failure to adequately fund its capital
requirements could have a material adverse effect on the Company’s business,
financial condition and results of operations. Moreover, the sale of
additional equity securities to raise financing will result in additional
dilution to the Company’s stockholders, and incurring additional indebtedness
could involve the imposition of covenants that restrict the Company
operations.

Our products and services are
subject to changes in applicable laws and regulations. The
Company’s business is particularly subject to changing federal and state laws
and regulations related to the provision of financial services to
consumers. The Company’s continued success depends in part on its
ability to anticipate and respond to these changes, and the Company may not be
able to respond in a timely or commercially appropriate manner. If
the Company fails to adjust its products and services in response to changing
legal and/or regulatory requirements, the ability to deliver its products and
services may be hindered which, in turn, could have a material adverse effect on
the Company’s business, financial condition and results of
operations.

We may continue to encounter
substantial competition in our business. The Company believes
that existing and new competitors will continue to improve their products and
services, as well as introduce new products and services with competitive price
and performance characteristics. The Company expects that it must
continue to innovate, and to invest in product development and productivity
improvements, to compete effectively in the several markets in which the Company
participates. Halo’s competitors could develop a more efficient
product or service or undertake more aggressive and costly marketing campaigns
than those implemented by the Company, which could adversely affect the
Company’s marketing strategies and could have a material adverse effect on the
Company’s business, financial condition and results of operations.

Important
factors affecting the Company’s current ability to compete successfully
include:

·

lead
generation and marketing costs;

·

service
delivery protocols;

·

branded
name advertising; and

·

product
and service pricing.

In
periods of reduced demand for the Company’s products and services, the Company
can either choose to maintain market share by reducing product service pricing
to meet the competition or maintain its product and service pricing, which would
likely sacrifice market share. Sales and overall profitability would
be reduced in either case. In addition, there can be no assurance
that additional competitors will not enter the Company’s existing markets, or
that the Company will be able to continue to compete successfully against its
competition.

We may not successfully manage our
growth. Our success will depend upon the expansion of our
operations and the effective management of our growth, which will place
significant strain on our management and our administrative, operational and
financial resources. To manage this growth, we may need to expand our
facilities, augment our operational, financial and management systems and hire
and train additional qualified personnel. If we are unable to manage
our growth effectively, our business would be harmed.

We rely on key executive officers,
and their knowledge of our business and technical expertise would be difficult
to replace. We are highly dependent on our executive
officers. If one or more of the Company’s senior executives or other
key personnel are unable or unwilling to continue in their present positions,
the Company may not be able to replace them easily or at all, and the Company’s
business may be disrupted. Competition for senior management
personnel having relevant industry expertise is intense, the pool of qualified
candidates is very limited, and we may not be able to retain the services of our
senior executives or attract and retain high-quality senior executives in the
future. Such failure could have a material adverse effect on the
Company’s business, financial condition and results of operations.

We may never pay dividends to our
common stockholders. The Company currently intends to retain
its future earnings to support operations and to finance expansion and,
therefore, the Company does not anticipate paying any cash dividends in the
foreseeable future other than to the holders of the Series A, Series B, and
Series C preferred stock of HGI, a first-tier subsidiary of the
Company.

The
declaration, payment and amount of any future dividends on common stock will be
at the discretion of the Company’s Board of Directors, and will depend upon,
among other things, earnings, financial condition, capital requirements, level
of indebtedness and other considerations the Board of Directors considers
relevant. There is no assurance that future dividends will be paid on
common stock or, if dividends are paid, the amount thereof.

Our common stock is quoted through
the OTC Bulletin Board, which may have an unfavorable impact on our stock price
and liquidity. The Company’s common stock is quoted on the OTC
Bulletin Board, which is a significantly more limited market than the New York
Stock Exchange, American Stock Exchange or NASDAQ. The trading volume
may be limited by the fact that many major institutional investment funds,
including mutual funds, follow a policy of not investing in Bulletin Board
stocks because they are considered speculative and volatile.

The
trading volume of the Company’s common stock has been and may continue to be
limited and sporadic. As a result, the quoted price for the Company’s
common stock on the OTC Bulletin Board may not necessarily be a reliable
indicator of its fair market value.

Additionally,
the securities of small capitalization companies may trade less frequently and
in more limited volume than those of more established companies. The
market for small capitalization companies is generally volatile, with wide price
fluctuations not necessarily related to the operating performance of such
companies.

Our common stock is subject to price
volatility unrelated to our operations. The market price of
the Company’s common stock could fluctuate substantially due to a variety of
factors, including market perception of the Company’s ability to achieve its
planned growth, the Company’s operating results and that of other companies in
the same industry, trading volume in the Company’s common stock, general
conditions in the economy and the financial markets, or other developments
affecting the Company or its competitors.

Our common stock is classified as a
“penny stock.” Rule 3a51-1 of the Securities Exchange Act of
1934 establishes the definition of a “penny stock”, for purposes relevant to us,
as any equity security that has a minimum bid price of less than $5.00 per share
or with an exercise price of less than $5.00 per share, subject to a limited
number of exceptions which are not available to us. It is likely that
the Company’s common stock will be considered a penny stock for the immediate
foreseeable future.

For any
transaction involving a penny stock, unless exempt, the penny stock rules
require that a broker or dealer approve a person’s account for transactions in
penny stocks and the broker or dealer receive from the investor a written
agreement to the transaction setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person’s account
for transactions in penny stocks, the broker or dealer must obtain financial
information and investment experience and objectives of the person and make a
reasonable determination that the transactions in penny stocks are suitable for
that person and that the particular person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.

The
broker or dealer must also provide disclosure to its customers, prior to
executing trades, about the risks of investing in penny stocks in both public
offerings and in secondary trading, the commissions payable to both the
broker-dealer and the registered representative, and the rights and remedies
available to an investor in cases of fraud in penny stock
transactions.

Because
of these regulations, broker-dealers may not wish to furnish the necessary
paperwork and disclosures and/or may encounter difficulties in their attempt to
buy or sell shares of the Company’s common stock, which may in turn affect the
ability of Company stockholders to sell their shares.

Accordingly,
this classification severely and adversely affects any market liquidity for the
Company’s common stock, and subjects the shares to certain risks associated with
trading in penny stocks. These risks include difficulty for investors
in purchasing or disposing of shares, difficulty in obtaining accurate bid and
ask quotations, difficulty in establishing the market value of the shares, and a
lack of securities analyst coverage.

The
Company’s corporate offices are located at 700 Central Expressway South, Suite
500, Allen, Texas 75013, where Halo has 34,524 square feet of office space under
lease. Pursuant to an office lease dated November 12, 2007, as
amended, the Company is required to make monthly lease payments of $32,663, with
an increase in May 2010 to $49,789 and in November 2010 to $60,346 per
month. The lease expires on August 14, 2014.

The
Company’s Common Stock is currently traded in the over-the-counter market and
quoted under the symbol HALN.OB (formerly, and as of December 31, 2009, under
the symbol GPAX.OB). The following are the high and low sales prices for the
Company’s Common Stock for the periods reflected below, as reported by Bloomberg
LP Investor Services:

UFiscal Year Ended December 31,
2009

UHigh

ULow

First
Quarter

$.03

$.03

Second
Quarter

$.08

$.02

Third
Quarter

$.60

$.03

Fourth
Quarter

$.40

$.05

UFiscal Year Ended December 31,
2008

UHigh

ULow

First
Quarter

$.10

$.09

Second
Quarter

$.09

$.03

Third
Quarter

$.09

$.09

Fourth
Quarter

$.09

$.03

The above
prices reflect inter-dealer prices, without retail mark-up, mark-down or
commissions and may not represent actual transactions.

The approximate number of stockholders
of record of the Company’s Common Stock on December, 31 2009 was 3,060. The
Company estimates that, in addition, there are approximately 1,700 stockholders
with shares held in “street name.”

Dividends

We intend
to retain future earnings for use in our business and do not anticipate paying
cash dividends in the foreseeable future.

Recent
Sales of Unregistered Securities

During the fiscal year ended December
31, 2009, except as included in our Quarterly Reports on Form 10-Q or in our
Current Reports on Form 8-K, we have not sold any equity securities
not registered under the Securities Act.

Repurchases
of Equity Securities

The Company did not repurchase any of
its equity securities during the year ended December 31, 2009.

Item 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

Forward-Looking
Statements

The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations (“MD&A”) is intended to help you understand our
historical results of operations during the periods presented and our financial
condition. This MD&A should be read in conjunction with our financial
statements and the accompanying notes, and contains forward-looking statements
that involve risks and uncertainties. See the section entitled “Forward-Looking
Statements” above.

Company
Overview

The Company, through its subsidiaries,
operates primarily in the consumer financial services industry, providing
services related to personal debt, credit, mortgage, real estate, loan
modification and insurance. The Company works with its clients, who
are consumers who may be in various stages of financial need, to assist in
reducing their debt, correcting their credit profile, securing a home mortgage,
buying or selling a residence, providing proper insurance for their assets,
mitigating potential home loss, and educating them in financial
matters.

Plan of
Operations

It is the intent of the Company to
continue expanding its direct-to-consumer business, both organically, as well as
potentially through acquisition. The Company also plans to increase
its concentration on the business-to-business marketing strategy, specifically
in the mortgage servicing industry. The Company has supplemented its
operating cash-flow with debt and equity financing to support its growth in
marketing and business development. The Company intends to pursue additional
funding through debt, subordinated debt, and equity financing to continue its
expansion and growth efforts. Specific details relating to previous debt and
equity financing can be found in the Liquidity and Capital Resources section
below and within Notes 5, 6, and 7 to the consolidated financial statements
contained in Item 8 of this Annual Report on Form 10-K.

Results
of Operations for the year ended December 31, 2009 Compared to the year ended
December 31, 2008

Revenues

Revenue increased $4,127,460 or 83%
from $4,986,496 for the year ended December 31, 2008 to $9,113,956 for the year
ended December 31, 2009. The increase is primarily due to the growth
of Halo Debt Solutions and this subsidiary’s overall improved market strategy
and ability to provide increasingly effective and efficient debt settlement
services to consumers. Halo Debt Solutions has adopted innovative
strategies to deploy marketing efforts directly to consumers and has developed
close, cooperative relationships with creditors, allowing for substantial
revenue growth.

Operating
Expenses

Sales and
marketing expenses include advertising, marketing and customer lead purchases,
and direct sales costs incurred including appraisals, credit reports, and
contract service commissions. Sales and marketing expenses increased
$608,599 or 78% from $776,790 for the year ended December 31, 2008 to $1,385,389
for the year ended December 31, 2009. This increase is
primarily attributable to the increased overall volume of lead generation
purchases for the year ended December 31, 2009, which has resulted in
substantial growth in revenues noted above.

General and Administrative expenses
increased $1,600,620 or 96% from $1,665,058 for the year ended December 31, 2008
to $3,265,678 for the year ended December 31, 2009. This increase is
primarily attributable to increased costs associated with rent expense to office
a growing workforce and variable general and administrative costs incurred to
grow revenues. Several new subsidiaries began operations during 2009,
including Halo Loan Modification Services, LLC, Halo Select Insurance Services,
LLC, and Halo Choice Insurance Services, LLC, and as such, there have been
increased general and administrative expenses and costs involved to get these
companies operating. Additionally, in association with the Merger, professional
service fees increased significantly for the year ended December 31,
3009. These services include legal, accounting, auditing, business
valuation, compliance, and consulting. A portion of these expenses is
non-recurring and should decrease in future periods.

Salary, wages and benefits increased
$3,695,080 or 140% from $2,630,906 for the year ended December 31, 2008 to
$6,325,986 for the year ended December 31, 2009. Approximately
$2,300,000 of the increase is attributable to increased costs associated with
employee head count and the hiring of more executive and senior management
personnel to accommodate a growing business. The remaining increase
of $1,399,823 is stock option compensation expense for any options that had
vested as of December 31, 2009. Stock option compensation expense was
$0 for the year ended December 31, 2008 compared to $1,399,823 for the year
ended December 31, 2009. As noted in the significant accounting
policies below, the fair value of stock options at the date of grant is
determined via the Black Scholes model and, since the options were exercisable
upon the occurrence of a specified event, the fair value of such options is
recognized in earnings over the vesting period of the options beginning when the
specified event becomes probable of occurrence. Stock compensation
expense is a non-cash expense item.

Although
overall Sales and Marketing expenses and General and Administrative expenses
have increased, the Company continues to improve operational efficiencies,
increase staffing at a modest rate and effectively manage fixed and variable
costs.

Other
Income

For the year ended December 31, 2009,
the Company recognized $75,000 in Other Income related to cash consideration
received by HGI from the Allen Economic Development Corporation (“AEDC”),
whereby the AEDC provided an economic development grant to the
Company. This grant was given to the Company to stimulate business
and commercial activity in the city of Allen, and, in return, Halo agreed to
retain its offices in Allen, TX for the duration of the office lease agreement
discussed previously under Item 2 herein.

The Company experienced additional
losses of $1,772,473 from a net loss of $123,485 for the year ended December 31,
2008 to a net loss of $1,895,958 for the year ended December 31,
2009. This increase in loss is primarily attributable to the
$1,399,823 in stock option compensation expense noted
above. Excluding the $1,399,823 in stock option compensation expense
for the year ended December 31, 2009, the Company had a loss of $496,135 for the
year ended December 31, 2009.

Certain critical accounting policies
affect the more significant judgments and estimates used in the preparation of
the Company’s consolidated financial statements. These policies are
contained in Note 2 to the consolidated financial statements and summarized
here.

URevenue
Recognition and Accounts Receivable

The Company generally recognizes
revenue in the period in which services are provided. HDS recognizes
its revenue over the average service period, defined as the average length of
time it takes to receive a contractually obligated settlement offer from each
creditor, calculated on the entire HDS client base, currently eight
months. The service being provided for each client is evaluated at an
individual creditor level, thus the revenue recognition period estimate is
calculated at an individual creditor level. The estimate is derived
by comparing the weighted average length of time from when the creditor was
enrolled with HDS to the time HDS received a contractually obligated settlement
offer, per creditor, on all accounts since the inception of HDS to the weighted
average length of time all other creditors that are currently enrolled at the
time of the estimate that have not received a contractually obligated settlement
offer. This dual approach ensures a holistic representation of the service
period. There are several factors that can affect the average service period,
including economic conditions, number of clients enrolled, operational
efficiencies, the time of year, and creditor dispositions. Therefore,
the average service period is analyzed on a quarterly basis ensuring an accurate
revenue recognition period estimate. In the event that the average
service period estimate changes, HDS will prospectively accrete the remaining
revenue to be recognized on current clients and recognize all future revenue
pursuant to the new estimate. Provisions for discounts, refunds and
bad debt are provided over the period the related revenue is recognized. Cash
receipts from customers in advance of revenue recognized are recorded as
deferred revenue.

Revenue recognition periods for HDS
customer contracts are shorter than the related payment
terms. Accordingly, HDS accounts receivable is the amount recognized
as revenue less payments received on account. The Company maintains
allowances for doubtful accounts for estimated losses resulting from the
inability of its customers to make required payments. Management considers the
following factors when determining the collectability of specific customer
accounts: past transaction history with the customer, current economic and
industry trends, and changes in customer payment terms. The Company
provides for estimated uncollectible amounts through an increase to the
allowance for doubtful accounts and a charge to earnings based on historical
trends and individual account analysis. Balances that remain
outstanding after the Company has used reasonable collection efforts are written
off through a charge to the allowance for doubtful accounts.

UUse of
Estimates and Assumptions

The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reported period. Actual results
could differ from those estimates. Significant estimates include the
company’s revenue recognition method and valuation of equity based
compensation.

UPrinciples
of Consolidation

The
consolidated financial statements of the Company for the year ended December 31,
2009 include the combined financial results of HGI, HCS, HDS, HGM, HGR,
HBI, HLMS, HSIS, HCIS, HFS, and HPA. All significant intercompany
transactions and balances have been eliminated in consolidation.

The
consolidated financial statements of the Company for the year ended December 31,
2008 include the combined financial results of HGI, HCS, HDS, HGM, HGR, and
HBI. All significant intercompany transactions and balances have been
eliminated in consolidation.

The
Company accounts for equity instruments issued to employees in accordance with
ASC 718 “Compensation-Stock Compensation” (formerly SFAS No. 123 (revised 2004),
Share-Based Payment (“SFAS 123R”)). Under ASC 718, the fair value of
stock options at the date of grant which are contingently exercisable upon the
occurrence of a specified event is recognized in earnings over the vesting
period of the options beginning when the specified events become probable of
occurrence. The specified event (Merger) occurred on September 30,
2009. As of September 30, 2009, there was no active market for the
Company’s common stock and management has not been able to identify a similar
publicly held entity that can be used as a benchmark. Therefore, as a
substitute for volatility, the Company used the historical volatility of the Dow
Jones Small Cap Consumer Finance Index, which is generally representative of the
Company’s size and industry. All transactions in which goods or
services are the consideration received for the issuance of equity instruments
are accounted for based on the fair value of the consideration received or the
fair value of the equity instrument issued, whichever is more reliably
measurable. The measurement date of the fair value of the equity
instrument issued is the earlier of the date on which the counterparty’s
performance is complete or the date on which it is probable that performance
will occur.

Liquidity
and Capital Resources

As of December 31, 2009, we had
cash and cash equivalents of $86,090. The decrease in cash and cash
equivalents from December 31, 2008 was due to cash used operating activities of
$1,454,945, cash used in investing activities of $235,421, offset by an increase
in cash provided by financing activities of $1,596,107.

Net cash used in operating activities
was $1,454,945 for the twelve months ended December 31, 2009, compared to
$790,671 net cash used in operating activities for the year ended
December 31, 2008. The net cash used in operating activities for the
year ended December 31, 2009 was due to net loss of $1,740,299, adjusted
primarily by the following: an increase in depreciation and amortization of
$71,052, an increase in bad debt expense of $1,640,659, an increase in
amortization of share-based compensation expense of $1,399,823, an increase in
accounts receivable of $2,758,751, an increase in accounts payable of $136,468,
and an increase in deferred rent of $63,050.

Accounts receivable increased by
$1,118,092 or 104%. The increase was a result of the increase in
gross accounts receivable of $2,758,751 offset by an increase of $1,640,659 in
bad debt expense. Allowance for loan loss is discussed in significant
accounting policies above. The increase in accounts receivable was
primarily related to the increase in growth in overall sales volume of customers
and revenue of Halo Debt Solutions.

The accounts payable increase is
primarily the result of the Company’s increase in general and administrative
costs which has resulted in an increase in monthly vendor commitments and
payables. The Company pro-actively manages the timing and aging of
vendor payables throughout the year. Deferred rent increased from
$123,989 at December 31, 2008 to $187,039 at December 31, 2009, and this
increase was related to executed contractual commitment additional office
space in the Company headquarters during the fiscal year for which the Company
negotiated deferred rental payments.

Net cash used in investing activities
was $235,421 for the year ended December 31, 2009, compared to net cash
used in investing activities of $211,450 for the year ended December 31,
2008. Our investing activities for the year ended December 31, 2009
consisted primarily of purchasing property and equipment of
$269,159. The growth in property and equipment is primarily
attributable to the new communication equipment, computer equipment, and office
furniture purchased throughout the year in connection with the increase in the
Company’s workforce.

Net cash provided by financing
activities was $1,596,107 for the year ended December 31, 2009, compared to
net cash provided by financing activities of $1,128,944 for the year ended
December 31, 2008. Our financing activities for the year ended December
31, 2009 consisted primarily of the proceeds received from the issuance of
preferred stock of $1,182,404, proceeds from notes payable of $641,000, proceeds
from notes payable from related parties of $255,000, offset by $447,127 in
payment of principal on notes payable, related party notes payable, and net
payments on the line of credit. The Company did pay $28,999 in
dividends during the year ended December 31, 2009.

As shown
below, at December 31, 2009, our contractual cash obligations totaled
approximately $4,432,325, all of which consisted of operating lease obligations
and debt principal
repayment.

Payments
due by Period

Contractual
Obligations

Less
than 1 Year

1-3
years

4-5
years

More
than 5

years

Total

Debt
Obligations

$

742,185

$

277,602

$

50,386

$

0

$

1,070,173

Operating
Lease Obligations

$

595,386

$

1,554,109

$

1,212,657

$

0

$

3,362,152

Total
Contractual Cash Obligations

$

1,337,571

$

1,831,711

$

1,263,043

$

0

$

4,432,325

The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the Company will need
additional financing to fund additional material capital expenditures and to
fully implement its business plan in a manner that not only continues to expand
the already established direct-to-consumer approach, but also allows the Company
to establish a stronger brand name in all the areas which it operates, including
mortgage servicing of distressed asset sectors.

There are
no assurances that additional financing will be available on favorable terms, or
at all. If additional financing is not available, the Company will
need to reduce, defer or cancel development programs, planned initiatives and
overhead expenditures as a way to supplement the cash flows generated by
operations. The Company has a backlog of fees under contract in
addition to the Company’s accounts receivable balance. The failure to
adequately fund its capital requirements could have a material adverse effect on
the Company’s business, financial condition and results of
operations. Moreover, the sale of additional equity securities to
raise financing will result in additional dilution to the Company’s
stockholders, and incurring additional indebtedness could involve the imposition
of covenants that restrict Company operations. Management is
trying to raise additional capital through sales of common stock as well as
seeking financing from third parties, via both debt and equity, to balance the
Company’s cash requirements and to finance specific capital
projects.

Off
Balance Sheet Transactions and Related Matters

Other than operating leases discussed
in Note 10 to the consolidated financial statements, there are no off-balance
sheet transactions, arrangements, obligations (including contingent
obligations), or other relationships with unconsolidated entities or other
persons that have, or may have, a material effect on financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources of the Company.

Interest Rate
Risk. Our business is highly leveraged and, accordingly, is
highly sensitive to fluctuations in interest rates. Any significant increase in
interest rates could have a material adverse affect on our financial condition
and ability to continue as a going concern.

As of the end of the period covered by
this report, the Company’s principal executive officer and principal financial
officer evaluated the effectiveness of the Company’s “disclosure controls and
procedures,” as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934. Based on that evaluation, the officers concluded that, as
of the date of the evaluation, the Company’s disclosure controls and procedures
were effective to provide reasonable assurance that information required to be
disclosed in the Company’s periodic filings under the Securities Exchange Act of
1934 is accumulated and communicated to management, including the officers, to
allow timely decisions regarding required disclosure. It should be noted that a
control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that it will detect or uncover failures
within the Company to disclose material information otherwise required to be set
forth in the Company’s periodic reports.

Report
of Management on Internal Control over Financial Reporting

The
Company’s management is responsible for establishing and maintaining adequate
internal control over financial reporting, as defined in Rule 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934. Our internal control over
financial reporting is a process designed by, or under the supervision of the
Company’s principal executive officer and principal financial officer, to
provide reasonable assurance to the Company’s management and Board of Directors
regarding the reliability of financial reporting and the preparation and fair
presentation of published financial statements in accordance with accounting
principles generally accepted in the United States of America (“GAAP”). Internal
control over financial reporting includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the Company’s transactions and dispositions of the Company’s
assets; (2) provide reasonable assurance that the Company’s transactions are
recorded as necessary to permit preparation of the Company’s financial
statements in accordance with GAAP, and that receipts and expenditures are being
made only in accordance with authorizations of the Company’s management and
directors; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the Company’s financial
statements.

The
Company’ management assessed the effectiveness of the Company’s internal control
over financial reporting as of December 31, 2009. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring
Organizations (COSO) of the Treadway Commission in Internal Control – Integrated
Framework. Based on this assessment, the Company’s management
concluded that, as of December 31, 2009, the Company’s internal control over
financial reporting is effective based on those criteria.

This
Annual Report does not include an attestation report of the Company’s
independent registered public accounting firm regarding internal control over
financial reporting pursuant to temporary rules of the Securities and Exchange
Commission that permit the Company to provide only management’s report in this
Annual Report.

Changes
in Internal Control Over Financial Reporting

During
the period covered by this report, there were no changes in the Company’s
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

On
September 30, 2009, the effective date of the Merger, the officers and
directors of the Company prior to the merger resigned, with the exception of
Bernard Zimmerman, who resigned as an officer and remained as a director until
December 31, 2009. Immediately following the resignations of the
former directors, Mr. Zimmerman (in his capacity as the sole remaining director
of GVC Venture Corp.) filled the vacancies resulting from the resignations, by
electing to the Board of Directors each of Brandon C. Thompson, Paul Williams,
Jimmy Mauldin, T. Craig Friesland and Richard G. Morris and the new Board of
Directors elected new executive officers of the Company. On January 1,
2010, Tony Chron, President of the Company, was elected to the Board of
Directors to fill the vacancy left by Bernard Zimmerman’s departure. Set forth
below is certain information regarding the persons who currently serve as
directors and executive officers of the Company.

Brandon
C. Thompson, 30, currently serves as Chairman of the Board and Chief Executive
Officer of the Company. Mr. Thompson was a co-founder of HGI and has
served as the Chairman of the Board of Directors and Chief Executive Officer of
HGI since its founding in January 2007. Commencing in March 2003, Mr.
Thompson served as a Loan Officer with Morningstar Mortgage, LLC, a mortgage
company, and eventually acquired the assets of that company through Halo Funding
Group, LLC in February 2005, which was ultimately consolidated into HGI in
January 2007. Following this acquisition, Mr. Thompson founded and has served as
Chairman, President, and Chief Executive Officer of Halo Credit Solutions, LLC,
Halo Debt Solutions, Inc., and Halo Group Consulting, Inc. In January
2007, upon the founding of HGI, Mr. Thompson contributed his interest in these
companies, as well as his interest in Halo Funding Group, LLC (currently named
Halo Group Mortgage, LLC), to HGI. The breadth of Mr. Thompson’s
entrepreneurial and consumer services experience led the Board of Directors to
believe this individual is qualified to serve as a director of the
Company. Mr. Thompson was nominated for the Ernst & Young
Entrepreneur of the Year Award, has served on the advisory board of Independent
Bank of Texas. Mr. Thompson graduated from Abilene Christian University with a
degree in Finance.

Paul
Williams, 53, currently serves as Vice Chairman of the Board, Chief Financial
Officer, Treasurer and Assistant Secretary of the Company. Mr.
Williams was a co-founder of HGI, has served as Vice Chairman of the Board,
Chief Financial Officer and Treasurer of HGI since its founding in January 2007
and as Assistant Secretary since late September 2009. Mr. Williams
has over 30 years of business experience primarily in the capital markets and
mergers and acquisitions. Since October 2007, Mr. Williams has also
served as an executive officer for Bison Financial Group, Inc., a business
development company, and as an executive officer for Blue Star Equities, Inc., a
capital markets company, since September 2007. From November 1999 to the
present, Mr. Williams has also served as the managing member of Lincoln America
Investments, LLC, a real estate and equity investment company. From
January 15, 2006 to March 12, 2008, Mr. Williams served as an officer and
director of NeXplore Corporation. In June 2007, NeXplore and its
executive team received an administrative order from the Arkansas Securities
Department, suspending their ability to offer or sell securities in the
state. Mr. Williams has previously served three terms on the Board of
the Texas Economic Development Council in Austin, and presently serves on the
Board of the Chamber of Commerce in Frisco, Texas. Mr. Williams
graduated from Austin College in Sherman, Texas with a double-major in Economics
and Business Administration. He also graduated from the Institute of
Organization Management, affiliated with the U.S. Chamber of
Commerce. The breadth of Mr. Williams’ entrepreneurial and financial
services experience led the Board of Directors to believe this individual is
qualified to serve as a director of the Company.

Tony
J. Chron

Tony J.
Chron, 55, joined the Company in late September 2009 as its
President. Mr. Chron brings to the Company over 33 years of business
experience in both public and private companies. From 1997 to
September 2009, Mr. Chron was a Senior Partner with Trademark Property Company,
a major mixed-use and retail developer, and served in various executive
capacities including, most recently, as Chief Operating Officer and Executive
Vice President. Mr. Chron also served on Trademark Property’s
Executive Committee. From 1986-1992 Mr. Chron served as Associate
Corporate Counsel and Director of Real Estate and Property Management for Pier 1
Imports, Inc., a specialty retailer. In 1992, following Pier 1
Imports’ purchase of Sunbelt Nursery Group, Inc., Mr. Chron served as General
Counsel and Vice-President of Real Estate for Sunbelt, a specialty nursery
retailer, and following the purchase by Frank’s Nursery & Crafts, Inc. of a
49% interest in Sunbelt, as Vice President of Store Development for Frank’s, a
specialty retailer, where he remained until 1994. From 1994 until
1997 Mr. Chron served as Vice President of Real Estate and Real Estate Legal for
Michael Stores, Inc., a specialty retailer. Mr. Chron earned a Doctor
of Jurisprudence degree from South Texas College of Law in 1983. He
also has a BS degree from Abilene Christian University. Mr. Chron has
been a licensed attorney in the State of Texas for more than twenty-six
years. The breadth of Mr. Chron’s professional and legal experience
led the Board of Directors to believe this individual is qualified to serve as a
director of the Company.

Jimmy
Mauldin

Jimmy
Mauldin, 60, currently serves as Chief Strategy Officer of the
Company. Mr. Mauldin was a co-founder of HGI, has served in various
capacities with HGI, including as President, Director, and Chief Strategy
Officer, since its founding in January 2007. Mr. Mauldin joined the
company which is currently named Halo Credit Solutions, LLC in June of
2005. In 2002, Mauldin founded Fund America Now, LLC, a national
fund-raising company, and served as Chairman, President, and Chief Executive
Officer. He also established and serves as a director for the Halo
Institute for Financial Education, a Section 501(c)(3) nonprofit
corporation. The breadth of Mr. Mauldin’s entrepreneurial experience
led the Board of Directors to believe this individual is qualified to serve as a
director of the Company.

T.
Craig Friesland

T. Craig
Friesland, 38, currently serves as Chief Legal Officer and Secretary of the
Company. Mr. Friesland was a co-founder of HGI and has served as a
Director and Chief Legal Officer since its inception in January
2007. He also practices law in his own firm, Law Offices of T. Craig
Friesland, founded in January 2005. Prior to establishing his own
firm, Mr. Friesland practiced law with Haynes and Boone, LLP, one of the largest
law firms in Texas, from September 1998 through December 2004. Mr.
Friesland earned his law degree at Baylor University School of Law in
1998. He also has a Master of Business Administration degree from
Baylor University and a Bachelor of Business Administration degree in Finance
from The University of Texas at Austin. Mr. Friesland was admitted to
the State Bar of Texas in 1998. The breadth of Mr. Friesland’s
professional legal experience led the Board of Directors to believe this
individual is qualified to serve as a director of the Company.

Richard
G. Morris, 55, currently serves as a Director of the Company. Mr.
Morris was a co-founder of HGI, and has served as a Director since its inception
in January 2007. Prior to joining the Company, he served in various
positions with United Parcel Service from 1976 until March 2002, most recently,
from January 2001 to March 2002 as one of its three District Operations
Managers. In that role, Mr. Morris was responsible for 5,400
employees, a staff of 18 senior managers, a monthly operating budget of
approximately $28 million, and revenues in excess of $35
million. After departing UPS, in July 2002, Mr. Morris became the
principal owner of Rammco Distributors, Incorporated, an equipment rental
company which he still owns. In July 2004, Mr. Morris co-founded Blue
River Development, Inc., a real estate investment and development company, and
is currently the sole owner and operator of this company. In August
2008, Mr. Morris acquired Port City, Inc., a plastics manufacturing company
which Mr. Morris also currently owns and operates. The breadth of Mr.
Morris’ entrepreneurial, managerial and operational experience led the Board of
Directors to believe this individual is qualified to serve as a director of the
Company.

Scott
McGuane

Scott
McGuane, 47, currently serves as Chief Marketing and Sales Officer of the
Company. Mr. McGuane joined the Company in January 2009 as its
President and in late September 2009 ceded that position to Mr. Tony Chron and
assumed the role of Chief Marketing & Sales Officer. Mr. McGuane
brings to the Company more than twenty years of experience in financial
services; retail lending and residential mortgage lending. Prior to
joining the Company, Mr. McGuane served as Executive Vice President and Head of
Retail Lending for Accredited Home Lenders, Inc., a residential mortgage lender,
from July 2008 to January 2009, as Senior Vice President and Director of Retail
Lending for Bear Stearns, a broker dealer, from April 2006 to July 2008, and as
Senior Vice President and Managing Director of Retail Mortgage Lending for
CitiFinancial Mortgage Co., an indirect subsidiary of Citigroup, from November
2002 to April 2006. Prior to joining the Company, Mr. McGuane
provided consulting for strategic planning, mergers and acquisitions, process
reengineering and change management across a wide range of industries, including
start-up ventures, non-profits, banking, telecommunications, energy and public
utilities. He has successfully managed lead system development,
licensing, operational responsibilities, and marketing efforts such as branding,
point-of-sale, branch offices, online, direct mail, and
telemarketing. Mr. McGuane received his Master of Business
Administration at Southern Methodist University and a Bachelor of Science from
Central Washington University.

There are
no family relationships among those serving as executive officers or directors
of the Company, except that Jimmy Mauldin is Mr. Thompson’s father-in-law and
Tony Chron is Mr. Thompson’s uncle. There are no arrangements or
other understandings between any of the Company’s directors or officers or
any other person pursuant to which any new officer or director was or is to be
selected as an officer or director.

The
directors will serve in such capacity until the Company’s next annual
meeting of stockholders. Our Restated Certificate of Incorporation
provides that our Board of Directors shall (exclusive of the number of directors
any series of preferred stock may have the right to elect as a separate class)
consist of a minimum of three and a maximum of twelve directors, as determined
by the Board. Officers serve at the pleasure of the
Board.

Section
16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), requires officers,
directors and persons who beneficially own more than 10% of a class of our
equity securities registered under the Exchange Act to file reports of ownership
and changes in ownership with the Securities and Exchange
Commission. Based solely upon a review of Forms 3 and 4 and
amendments thereto furnished to us during fiscal year 2009 and Forms 5 and
amendments thereto furnished to us with respect to fiscal year 2009, or written
representations that Form 5 was not required for fiscal year 2009, we believe
that all Section 16(a) filing requirements applicable to each of our officers,
directors and greater-than-ten percent stockholders were fulfilled in a timely
manner. We have notified all known beneficial owners of more than 10%
of our common stock of their requirement to file ownership reports with the
Securities and Exchange Commission.

We do not
currently have a Code of Ethics applicable to our principal executive,
financial, and accounting officers.

No
Committees of the Board of Directors; No Financial Expert

We do not
presently have a separately constituted audit committee, compensation committee,
nominating committee, executive committee or any other committees of our Board
of Directors. Nor do we have an audit committee “financial
expert”. At present, our entire Board of Directors acts as our audit
committee. None of the members of our Board of Directors meets the
definition of “audit committee financial expert” as defined in Item 407(d) of
Regulation S-K promulgated by the Securities and Exchange
Commission. We have not retained an audit committee financial expert
because we do not believe that we can do so without undue cost and
expense. Moreover, we believe that the present members of our Board
of Directors, taken as a whole, have sufficient knowledge and experience in
financial affairs to effectively perform their duties.

The
particulars of compensation paid to the following persons during the fiscal
period ended December 31, 2009 and 2008 are set out in the summary compensation
table below:

·

our
Chief Executive Officer (Principal Executive Officer);

·

our
Chief Financial Officer (Principal Financial
Officer);

·

each
of our three most highly compensated executive officers, other than the
Principal Executive Officer and the Principal Financial Officer, who were
serving as executive officers at the end of the fiscal year ended December
31, 2009; and

·

up
to two additional individuals for whom disclosure would have been provided
under the item above but for the fact that the individual was not serving
as our executive officer at the end of the fiscal year ended December 31,
2009;

The
Company has no employment agreements with any of its Directors or executive
officers.

For the
fiscal year ended December 31, 2009 no outstanding stock options or other
equity-based awards were repriced or otherwise materially
modified. No stock appreciation rights have been granted to any of
our Directors or executive officers and none of our Directors or executive
officers exercised any stock options or stock appreciation
rights. There are no non-equity incentive plan agreements with any of
our Directors or executive officers.

Mr.
McGuane was granted two separate stock option awards in January and August 2009,
for the purchase of 500,000 shares and 250,000 shares,
respectively. Both stock option awards were granted pursuant to the
HGI 2007 Stock Plan and have a standard 2 year vesting period. The
Grant Date Fair Value of the options was $410,140 and $215,070, respectively,
calculated at $.082 and $0.86 per share, respectively. During the
year ended December 31, 2009, options for 125,000 shares vested, creating a
stock compensation expense of $102,535.

Mr. Chron
was granted a stock option award in July, 2009 for the purchase of 100,000
shares. This stock option award was granted pursuant to the HGI 2007
Stock Plan and has a standard 2 year vesting period. The Grant Date
Fair Value of the options was $85,939, calculated at $0.86 per
share. During the year ended December 31, 2009, none of such options
vested and accordingly there was no related stock compensation
expense.

For the
fiscal year ended December 31, 2009 and prior to the Merger, the Company’s
directors received no compensation for their services as directors. Halo has not
established any standard arrangements pursuant to which directors have been
compensated for their services, although all directors are reimbursed for
out-of-pocket expenses, including those incurred in connection with attendance
at Board of Directors meetings. The Company may establish a
compensation plan for its directors in the future.

There are
no employment or other contracts or arrangements with officers or Directors.
There are no compensation plans or arrangements, including payments to be made
by us, with respect to our officers, Directors or consultants that would result
from the resignation, retirement or any other termination of such Directors,
officers or consultants. There are no arrangements for Directors, officers,
employees or consultants that would result from a
change-in-control.

The
following table sets forth certain information with respect to the beneficial
ownership, as of March 10, 2010 of the Company’s common stock, which is the
Company’s only outstanding class of voting securities, and the voting power
resulting from such beneficial ownership, by

·

each
stockholder known by the Company to be the beneficial owner of more than
5% of the Company’s outstanding common stock;

·

each
director of the Company;

·

each
executive officer of the Company; and

·

all
directors and executive officers of the Company as a
group.

UBeneficial
Owner (1)

Amount
and Nature

of
Beneficial

UOwnership

Percent

Uof
Class (3)

Brandon
C. Thompson (2)

20,551,109

48.7%

Jimmy
Mauldin(2)

9,014,487

21.3%

Paul
Williams(2)

4,500,243

10.7%

T.
Craig Friesland(2)

2,250,122

5.3%

Richard
G. Morris(2)

2,069,447
(4)

4.9%

Tony
J. Chron (2)

1,208,177
(5)

2.9%

Scott
McGuane (2)

312,517
(6)

*

Directors
and executive officers as a group (seven persons)

39,906,102
(7)

95.0%

(1)We
understand that, except as noted below, each beneficial owner has sole voting
and investment power with respect to all shares attributable to that
owner.

(4)Includes
(a) 3,822 shares of the Company’s Series Z preferred stock (172,009 shares of
the Company’s common stock into which such Series Z preferred stock will be
convertible) issuable upon exercise of HGI stock options and (b) 3,194 shares of
the Company’s Series Z preferred stock (143,758 shares of the Company’s common
stock into which such Series Z preferred stock will be convertible) issuable
upon conversion of HGI preferred stock.

(5)Includes
(a) 978 shares of the Company’s Series Z preferred stock (44,002 shares of the
Company’s common stock into which such Series Z preferred stock is convertible)
issuable upon conversion of HGI preferred stock and (b) 556 shares of the
Company’s Series Z preferred stock (25,001 shares of the Company’s common stock
into which such Series Z preferred stock will be convertible) issuable upon
exercise of HGI stock options.

(6)Represents
shares issuable upon exercise of HGI stock options.

(7)Includes
(a) 11,322 shares of the Company’s Series Z preferred stock (509500 shares of
the Company’s common stock into which such Series Z preferred stock will be
convertible) issuable upon exercise of HGI stock options and (b) 3,194 shares of
the Company’s Series Z preferred stock (143,758 shares of the Company’s common
stock into which such Series Z preferred stock will be convertible) issuable
upon conversion of HGI preferred stock.

Changes in
Control

We are
unaware of any contract or other arrangement the operation of which may at a
subsequent date result in a change of control of our Company.

Securities
authorized for issuance under equity compensation plans

The
following table provides information as of the end of the most recently
completed fiscal year, with respect to Company compensation plans (including
individual compensation arrangements) under which equity securities of the
Company are authorized for issuance.

Equity
Compensation Plan Information

A(1)

B

C

Plan
category

Number
of securities to be issued upon exercise of outstanding options, warrants
and rights

As
a consequence of the Merger, outstanding options as to 1,794,422 of the
Company’s shares vested.

(2)

Includes
2,827,623 shares subject to stock options under the HGI 2007 Stock
Plan.

Following
is a brief description of the material features of each compensation plan under
which equity securities of the Company are authorized for issuance, which was
adopted without the approval of the Company security holders:

Prior to
the Merger, HGI granted stock options to certain employees and contractors
under the HGI 2007 Stock Plan. Pursuant to the terms of the
Merger and the terms of the HGI 2007 Stock Plan, the Company’s common stock will
be issued upon the exercise of the HGI stock options. At December 31,
2009, pursuant to the terms of the Merger Agreement, all options available for
issuance under the HGI 2007 Stock Plan have been forfeited and consequently the
Company has no additional shares subject to options or stock purchase rights
available for issuance under the HGI 2007 Stock Plan. Currently
outstanding options under the 2007 Stock Plan vest over a period no greater than
two years, are contingently exercisable upon the occurrence of specified events
as defined by the option agreements, and expire upon termination of employment
or five years from the date of grant.

Transactions
with Related Persons, Promoters and Certain Control Persons

Since the beginning of the fiscal year
January 1, 2009 and except as disclosed below, none of the following persons has
had any direct or indirect material interest in any transaction to which the
Company was or is a party, or in any proposed transaction to which
the Company proposes to be a party:

·

any
director or officer of the Company;

·

any
proposed director of officer of the
Company;

·

any
person who beneficially owns, directly or indirectly, shares carrying more
than 5% of the voting rights attached to the Company’s common stock;
or

·

any
member of the immediate family of any of the foregoing persons (including
a spouse, parents, children, siblings, and
in-laws).

The
Company is indebted to Brandon C. Thompson, Chairman of the Board of Directors,
Chief Executive Officer and a director of the Company, in the aggregate amount
of $209,000, which amount is evidenced by promissory notes in the original
principal amounts of $149,000, $40,000 and $20,000,
respectively. Each of such notes carries an interest rate of
8%. As of December 31, 2009, an aggregate amount of $209,000 was
outstanding on these notes. The aggregate amount of interest paid by
the Company on this indebtedness during the fiscal year ended December 31, 2009
was $21,150.

The
Company is indebted to Jimmy Mauldin, Chief Strategy Officer and a director of
Halo, in the aggregate amount of $149,000, which amount is evidenced by
promissory notes in the original principal amounts of $99,000, $15,000, $20,000
and $15,000, respectively. Each of such notes carries an interest
rate of 8% with the exception of the last $15,000 note which carries an interest
rate of 0.71%. As of December 31, 2009, an aggregate amount of
$134,000 was outstanding on these notes. The aggregate amount of
interest paid by the Company on this indebtedness during the fiscal year ended
December 31, 2009 was $5,570.

The
Company’s common stock is quoted through the OTC Bulletin Board
System. For purposes of determining whether members of the Company’s
Board of Directors are “independent,” the Company’s Board utilizes the standards
set forth in the NASDAQ Stock Market Marketplace Rules. At present,
the Company’s entire Board serves as its Audit, Compensation and Nominating
Committees. The Company’s Board of Directors has determined that, of
the Company’s present directors, Richard G. Morris, constituting one of the six
members of the Board, is an “independent director,” as defined under NASDAQ’s
Marketplace Rules, for purposes of qualifying as independent members of the
Board and an Audit, Compensation and Nominating Committee of the Board, but that
Brandon C. Thompson, Paul Williams, Jimmy Mauldin, Tony J. Chron, and T. Craig
Friesland are not “independent directors” since they serve as executive officers
of the Company. In reaching its conclusion, the Board determined that
Mr. Morris does not have a relationship with the Company that, in the Board’s
opinion, would interfere with his exercise of independent judgment in carrying
out the responsibilities of a director, nor does Mr. Morris have any of the
specific relationships set forth in NASDAQ’s Marketplace Rules that would
disqualify him from being considered an independent director.

Since the
effective date of the Merger, the Company has not changed the structure of its
Board of Directors and currently, Mr. Brandon C. Thompson serves as both
Chairman of the Board and Chief Executive Officer. As noted above,
Mr. Richard G. Morris is the sole independent director and, as a recent addition
to the Board of Directors, Mr. Morris has not taken on any supplemental role in
his capacity as director. It is anticipated that additional
independent directors will be added to the Board, however, the Company’s Board
of Directors has not set a timetable for such action.

In light
of the recent change in the Company’s business (following the Merger), the
Company’s Board of Directors is of the view that the current leadership
structure is suitable for the Company at its present stage of development, and
that the interests of the Company are best served by the combination of the
roles of Chairman of the Board and Chief Executive Officer.

As a
matter of regular practice, and as part of its oversight function, the Company’s
Board of Directors undertakes a review of the significant risks in respect of
the Company’s business. Such review is conducted in concert with the
Company’s in-house legal staff, and is supplemented as necessary by outside
professionals with expertise in substantive areas germane to the Company’s
business. With the Company’s current governance structure, the
Company’s Board of Directors and senior executives are, by and large, the same
individuals, and consequently, there is not a significant division of oversight
and operational responsibilities in managing the material risks facing the
Company.

The
following information summarizes the fees billed to us by Montgomery Coscia
Greilich LLP for professional services rendered for the fiscal year ended
December 31, 2009 and by KBA Group LLP for services rendered for the fiscal year
ended December 31, 2008.

UAudit
FeesU . Fees billed for
audit services by Montgomery Coscia Greilich L.L.P. were $33,937 in fiscal year
2009. Fees billed for audit services by KBA Group LLP were $35,000 in fiscal
year 2009 related to the audit for the year ended December 31, 2008. Audit fees
include fees associated with the annual audit and the reviews of the Company’s
quarterly reports on Form 10-Q, and other SEC filings.

UAudit-Related
FeesU . The Company did not
pay any audit-related service fees to Montgomery Coscia Greilich L.L.P. or KBA
Group LLP, other than the fees described above, for services rendered during
fiscal year 2009 or 2008.

UTax
FeesU . Fees billed for tax
compliance by Montgomery Coscia Greilich L.L.P. were $6,896 in fiscal year
2009. The Company did not pay and tax fees to KBA Group LLP for
services rendered during fiscal year 2009 or 2008.

UAll
Other FeesU . Other Fees billed by
Montgomery Coscia Greilich L.L.P. were $2,286 in fiscal year
2009. The Company was not billed for fees for any other services by
KBA Group LLP not described above in fiscal year 2009 or 2008.

Consistent
with SEC policies regarding auditor independence, the audit committee has
responsibility for appointing, setting compensation, approving and overseeing
the work of the independent auditor. In recognition of this
responsibility, the audit committee pre-approves all audit and permissible
non-audit services provided by the independent auditor. The Board of
Directors serves as the audit committee for the Company.

(1)and (2)
The financial statements and financial statement schedules required to be filed
as part of this report are set forth in Item 8 of Part II of this
report.

(3) Exhibits.
See Item 15(b) below.

(b)
Exhibits required by Item 601 of Regulation S-K

Exhibit
No.

Description

2.1

Agreement
and Plan of Merger dated as of September 17, 2009, by and among Halo
Group, Inc., GVC Venture Corp. and GVC Merger Corp. (filed as Exhibit 2.1
to Form 8-K filed with the Commission on September 17, 2009, and
incorporated herein by reference).

3.1

Restated
Certificate of Incorporation of GVC Venture Corp. changing the name of the
Company to Halo Companies, Inc., filed with the Secretary of State of the
State of Delaware on December 11, 2009 (filed as Exhibit 3.1 to Form 8-K
filed with the Commission on December 15, 2009, and incorporated herein by
reference).

3.2

Amendment
to Restated Certificate of Incorporation of Halo Companies, Inc., filed
with the Secretary of State of the State of Delaware on December 11, 2009
(filed as Exhibit 3.2 to Form 8-K filed with the Commission on December
15, 2009, and incorporated herein by reference).

3.3

Amended
By-Laws of Halo Companies, Inc., as amended through December 11, 2009
(filed as Exhibit 3.3 to Form 8-K filed with the Commission on December
15, 2009, and incorporated herein by reference).

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

Date:
March 24, 2010

By:

/s/
Brandon Cade Thompson

Brandon
Cade Thompson

Chief
Executive Officer

(Principal
Executive Officer)

Date:
March 24, 2010

By:

/s/
Paul Williams

Paul
Williams

Chief
Financial Officer

(Principal
Financial Officer)

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

We have
audited the accompanying consolidated balance sheet of Halo Companies, Inc. as
of December 31, 2009, and the related consolidated statements of operations,
changes in shareholders’ equity and cash flows for the year then ended.
Halo Companies, Inc. management is responsible for these financial statements.
Our responsibility is to express an opinion on these financial statements based
on our audit.

We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Halo Companies, Inc. as of December
31, 2009, and the results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally accepted in the United
States of America.

The
accompanying financial statements have been prepared assuming Halo Companies,
Inc. will continue as a going concern. As discussed in Note 3 to the
financial statements, Halo Companies, Inc. has incurred losses since its
inception and has not yet established profitable operations. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. Management’s plans in regards to these matters are also described in
Note 3. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

We have
audited the accompanying consolidated balance sheet of Halo Group, Inc. and
Subsidiaries (the “Company”) as of December 31, 2008 and the related
consolidated statements of operations, changes in shareholders’ equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our
audit.

We
conducted our audit in accordance with auditing standards generally accepted in
the United States of America.

Those
standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.

In our
opinion, the consolidated financial statements referred to above present fairly,
in material respects, the financial position of Halo Group, Inc. and
Subsidiaries as of December 31, 2008 and the results of its operations and cash
flows for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.